Against The Monoculture

As most of you know, I worry a lot about the American Monoculture: where 80% of the music downloads got to 1% of the musicians. Where 80% of the people buy from H & M or Forever 21, taking advantage of the exploitation of Bangladesh kids in the factories. Where a huge percentage of the population gets their meals from McDonalds or KFC. SO I have spent the last week in New Orleans, Florence Alabama and Oxford Mississippi observing and consuming a regional culture made by artisans with a passion that is quite remarkable for our cynical times.

i walked around the Bywater neighborhood of New Orleans and photographed 50 row houses and not a single one of them was painted the same way.

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Then I drove up to Florence, Alabama where the clothing designer Billy Reid was holding his sixth annual Shindig; a celebration of southern food, music and fashion.

Billy Reid

Billy Reid

Billy is a prime example of what the Southern Culture scholar John T. Edge calls the new southern Rennaissance. He has planted his flag in Florence and has revived the town. It has a flourishing food scene and of course still pulls upon the music scene from Muscle Shoals which is the next town over. What he and other southern designers like Natalie Chanin are trying to do is bring the aesthetic of “farm to table” that they have adopted from their southern food brethren, to their work in clothing. Could the South with its bountiful cotton harvest become a center for artisanal fabric development in the same way that the Italians have continued to sustain their local artisans? It’s of course not an easy job in an age of globalization when all fabric manufacturing is going to Asia. But as someone said,”you have to start somewhere”.

Throughout the weekend I was surrounded by a sort of southern hipster that seemed distinctive from the tribes of Brooklyn or Echo Park. Their culture is not as dependent on the Internet. Ashley Diamond, a fashion writer from New York is actually starting a regional culture magazine with no Internet site. Much of the energy comes from face to face meetings, meals and jam sessions. It is regional in that a great cook like Ashley Christensen from Raleigh, NC can identify with Andy Ticer and Michael Hudman who cook in Nashville.

There is a tremendous lack of understanding between the South and the North in America. In some ways I found New Orleans to be far more integrated racially than Los Angeles. Those of us from the North have dined on the amazing cultural banquet that the South has given us: Louis Armstrong, Howlin’ Wolf, Elvis Presley, Little Richard, Willie Nelson and Billy Reid featured two young bands Wild Cub and The Apache Relay that are carrying on the tradition. We talked a lot about the word “curation” which I have been using around here recently. I think people want a simpler life. They want a few good pieces of clothing that will last, some good meals that are memorable, and some good music that is original and not just some DJ sample.

They are trying to do that in Louisiana, Alabama and Mississippi. The artists are trying really hard to get beyond the legacy of Selma and Birmingham. They don’t have all the answers, but at least they are making a really good stab at creating an original regional culture.

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The Agent Problem

It occurred to me this morning as I scanned the headlines that three of the big stories in the paper this morning all had the same root cause. The flood of child migrants on our Southern border, the flood of inversion deals as companies seek to lower their tax bill and Rupert Murdoch’s quixotic attempt to takeover Time Warner all start with what I call the “Agent Problem”. An agent is an intermediary who makes his profit from a transaction without regard to the larger consequences. Let’s start with the Inversion issue. The Treasury Secretary says the Obama administration may have to act to stop the flood of deals being proposed by Investment Banks (agents).

The action comes in the face of a recent increase in United States companies reaching deals to reorganize overseas, creating an explosive political issue that Mr. Obama has called a lack of “economic patriotism.” Investment banks have been counseling companies to pursue such transactions because of the potential tax benefits.

The wizards at Goldman Sachs don’t care about eroding the tax base of America, they just want another fee. The same mentality went into the idea some genius proposed to Rupert Murdoch to acquire Time Warner. The deal had nothing to do about innovation or creativity–supposedly the root mission of a media company–it was just financial engineering. size for the sake of Rupert’s ego. Of course there would have been millions in fees to investment bankers, but the businesses would have suffered through the turmoil and ultimately would have destroyed value, like most of the other media mergers that preceded it.

By now you are wondering how does migrant children fit into all of this? In this case the agents are “Coyotes” trolling the slums of Guatemala, Honduras and San Salvador. Armed with misleading marketing materials which led poor parents to believe that if their kids could make it over the border they could qualify for U.S. citizenship, they signed up 50,000 kids in four months to come with them over the border. None of this would have happened without the agents.As Interpol points out, people smuggling is a huge business for organized crime networks.

The flow of migrants across borders is controlled increasingly by criminal networks. Due to more restrictive immigration policies in destination countries and improved technology to monitor border crossings, willing illegal migrants rely increasingly on the help of organized people smugglers.

I don’t know how we deal with the agent problem. They are always moving on to the next deal, and never get blamed for the disasters they leave behind. Any thoughts?

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The Sharing Economy-A Dissent

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I’ve been thinking a lot about the role of the University in creating a humanistic framework for this technological disruption that is affecting all of our lives. Then I came across a column from A.O.Scott this morning.

Universities and colleges, the seedbeds of a cultural ideal consecrated to both excellence and democracy, to citizenship and to knowledge for its own sake, are becoming either hothouses for the new dynastic elite or training centers for the technocratic debt peons of the digital future.

It is that last line that caught me up short: “training centers for the technocratic debt peons of the digital future.” WTF? So I just came back from the Aspen Institute where I participated in a three day round table on digital disruption. Some of the young technocrats were extolling the role of the sharing economy in providing a financial lifeline for the kids who are coming out of college and can’t find a job. Are they the “debt peons of the digital future”? At one point someone said that the average 30 year old might be holding down four or five jobs simultaneously in this brave new world–driving an Uber car while renting their spare room on Air BnB and raising money for their video on Kickstarter while doing odd jobs on Taskrabbit.

And then a friend pointed me to an old blog post called The Locust Economy and it all came into focus.

I was picking the brain of a restauranteur for insight into things like Groupon. He confirmed what we all understand in the abstract: that these deals are terrible for the businesses that offer them; that they draw in nomadic deal hunters from a vast surrounding region who are unlikely to ever return; that most deal-hunters carefully ensure that they spend just the deal amount or slightly more; that a badly designed offer can bankrupt a small business.

He added one little factoid I did not know: offering a Groupon deal is by now so strongly associated with a desperate, dying restaurant that professional food critics tend to write off any restaurant that offers one without even trying it.

Yet, I’ve used (and continue to use) these services and don’t feel entirely terrible about doing so, or truly complicit in the depredations of Groupon. Why? It’s because, like most of the working class, I’ve developed a locust morality.

The writer Venkatesh Rao makes the basic point that the so called sharing economy is designed by the 1% to help the 90% destroy the livelihoods of the 9% who make up the small business middle class. Rao’s piece is fairly complicated but you should definitely read it because he points towards the future of digital peonage that Scott referenced.

In other words, in a locust economy, you cannot just decide to go somewhere and get in your car to drive there. You have to coordinate with other potential users of that shared resource. You have to keep your apartment clean and sharing-ready. You have to do minimum-wage work that you might consider beneath you (though such status concerns don’t bother me, annoying chores do).

In the sharing economy, we may not be eating each other literally, but we’re certainly eating into what Richard Dawkins called the extended phenotype of our neighbors. To the extent that your belongings are a logical expression of your genes and memes sharing them amounts to allowing others to eat them.

So the harsh bottomline of the locust economies, once the Jeffersonian middle class prey base has been bankrupted, is that we locusts turn on each other.

We call it peer production and prosumer economics, but it isn’t Jeffersonian producerism. It is locusts in their cannibalistic phase.

When the harvest is gone, software eating everything translates to prosumers eating each other.

I sent the Locust Economy blog to one of my mentors. This is what he wrote back.

for better or worse – the sharing economy has to lower the GDP and at least currently would speed up the demise of the middleclass and push more onto the long tail of minuscule incomes that in turn accelerates the sharing economy since that is the only way these folks can survive. This all has many unintended consequences and in the long run may not enhance sustainability.

Which brings me back to my original question. If the Universities are “becoming either hothouses for the new dynastic elite or training centers for the technocratic debt peons of the digital future” then we are screwed as a culture. If we are not willing to question some of the suppositions of the technocratic elite before we send our students into the maw of the New Economy, then we have lost our purpose. If the future we are creating for them is a life of five part-time jobs in the sharing economy then we have failed them and we might as well close up shop.

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Fortress Americas

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For a long time I’ve been citing Robert Kaplan’s thesis put forth in his prescient book The Coming Anarchy.As I wrote two years ago,

Asia, Europe,the Middle East and Africa will fulfill Robert Kaplan’s prediction of The Coming Anarchy: Shattering the Dreams of the Post Cold War in which tribal, ethnic and religious conflicts combine with resource depletion to destabilize much of the world order. The key to our survival will be to pull back from our role as the world’s unpaid policeman, rebuild our own production capacity and manage our natural resources with a view towards sustainability. I do not see either political party confronting this possibility, but I do think the Neo-con vision of Romney and Ryan would make a bad situation worse.

Now of course all of this seems to be coming true as the papers are filled with the anarchy in Syria, Iraq, Ukraine, Libya, Nigeria, Afghanistan, Pakistan and Gaza. Richard Haas, President of the Council on Foreign Relations argues that the Mid East is entering a new Thirty Years War.

Policymakers must recognize their limits. For now and for the foreseeable future – until a new local order emerges or exhaustion sets in – the Middle East will be less a problem to be solved than a condition to be managed.

The implication, of course is that it is our policy to manage. I disagree. First off, the implications of the Thirty Years War will be felt in Europe, Africa and Asia where the migration pressures of people fleeing drought and conflict will be strongest. By contrast the Western Hemisphere is in a period of extraordinary growth and peace. Gone are many of the military dictators in South America. Despite some of the immigration turmoil coming from Honduras and El Salvador, even George Will admits we can handle the influx of immigrants.

“We ought to say to these children, ‘Welcome to America, you’re going to go to school and get a job and become Americans,’” Will implored. “We have 3,141 counties in this country. That would be 20 per county. The idea that we can’t assimilate these eight-year-old criminals with their teddy bears is preposterous.”

Three years ago I wrote about this, without much traction. Continue reading

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Fork in the Road

s01_RTX14HWXYou know some big shifts are going on when the Washington conventional wisdom is so separated from the rest of the country. This morning the New York Times’ Peter Baker writes about Obama’s “management” of the multiple foreign policy crises, without ever once asking just why these civil conflicts are ours to manage. Think about Syria, Ukraine and Gaza. They are all essentially sectarian wars around local power struggles. This is not Hitler trying to rule the world, and yet somehow Baker assumes this is our problem to manage. Does the Chinese President wake up each morning thinking about he should manage these conflicts?

What this mindset of the U.S. as global unpaid policeman does is create the most absurd set of contradictions as even Baker acknowledges.

The crosscurrents can be dizzying. Even as Mr. Obama presses Russia to stop fomenting a virtual civil war in Ukraine, he is trying to collaborate with Moscow in a diplomatic campaign to force Iran to scale back its nuclear program. Even as he pressures Iran over its nuclear program, he finds himself on the same side as Tehran in combating a rising Sunni insurgency in Iraq. Even as he sends special forces to help squelch those insurgents, he is trying to help their putative allies against the government in Syria next door.

I have been saying for some time that the 2016 election has to confront this issue. The American people are tired of meddling in the regional disputes of the world while so many of our own people are out of work and so much needs to be done to repair our failing third world infrastructure. Even Ukraine, is essentially a European problem, as Germany, France and the UK are Russia’s biggest trading partners and the ones with the most influence over Putin. Yes we should negotiate with Iran, in concert with our allies over their nuclear program, but the idea that every civil war in the world is our problem is a dead notion that must be rethought.

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Talent Matters

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Sometime between the popularization of You Tube and the birth of Amazon’s self publishing platform the notion has been bruited about that if you keep at writing books or making videos you will get really good at it. This notion has been popularized by Malcolm Gladwell’s “10,000 hour thesis” which says that if you practice the violin for 10,000 hours you can play at Carnegie Hall. I’ve always thought this was pure bunkum and now some scientists have come forth to rebut this idea.

The new paper, the most comprehensive review of relevant research to date, comes to a different conclusion. Compiling results from 88 studies across a wide range of skills, it estimates that practice time explains about 20 percent to 25 percent of the difference in performance in music, sports and games like chess.

We live in a time that Andrew Keen calls “the cult of the amateur” and as much as I would like to encourage the Eric Clapton wannabes, spending 10,000 hours in your room copying his licks ain’t going to make you a brilliant guitar player. When I was on the road with The Band in the early 1970′s we would inevitably end up at a party after the concert. As the evening wore on the instruments would come out and a jam would start. Where the decent amateur would always come up short was in his (or her) ability to improvise. The ability to react to another player separated the great from the good.

In my book Outlaw Blues, I posited a Gresham’s Law of media–that bad content drives out good. Gresham’s Law is about information asymmetry, which was clarified by George Akerlof in a paper called “The Market for Lemons:Quality Uncertainty and the Market Mechanism”.

Akerlof says that when you are buying a used car you assume the worst—it’s a lemon—in your negotiation stance. Thus the seller of a really good used car always loses out. No one will pay for more than “average quality”. The average consumer of media in our Broadband universe is like the buyer of the used car, she assumes the content is “of average quality” and thus the rise of what Wired Magazine editor Chris Anderson calls Free: The Future of a Radical Price. If the You Tube video I’m about to watch turns out to be a “lemon”, I have lost nothing so long as it is free, except my attention to the Google ad accompanying the video. Does bad content drive out good?

We used to solve this problem by having critics who would weed out the good stuff and warn us to stay away from the dreck. But nobody listens to critics anymore (witness Transformers) so I will default to paying as little as possible for my entertainment, even if that means stealing it.

I still believe in genius. I want to believe “ars longa, vita brevis”–that art is the only thing that lasts, the only way man makes his mark on the ages. Lets stop fooling ourselves that anyone can be a genius–fouling up the Internet with hours of crap. All you have is your own vote as to what’s good and what is not. Don’t waste another second on the second rate.

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Bizarro World 2016

Hillary Clinton & Robert Kagan

Hillary Clinton & Robert Kagan

Something truly odd is happening in the political run up to the 2016 presidential campaign. The signs are everywhere that the classical right -left political alignments are falling apart.

First comes word that some of the key Neo Cons of the right are lining up behind Hillary Clinton, in hopes of a revival of their aggressive military policy.

Even as they castigate Mr. Obama, the neocons may be preparing a more brazen feat: aligning themselves with Hillary Rodham Clinton and her nascent presidential campaign, in a bid to return to the driver’s seat of American foreign policy.

The driver behind this “brazen” move is of course the potential candidacy of Rand Paul as the Republican nominee.

In response, Mark Salter, a former chief of staff to Senator McCain and a neocon fellow traveler, said that in the event of a Paul nomination, “Republican voters seriously concerned with national security would have no responsible recourse” but to support Mrs. Clinton for the presidency.

At the same time that Hillary is tacking to the right, Ralph Nader has released his latest book, Unstoppable: The Emerging Left-Right Alliance to Dismantle the Corporate State, which makes the case that an alliance of left liberals and right libertarians could unite in “opposition to the destruction of civil liberties, the economically draining corporate welfare state, the relentless perpetuation of America’s wars, the sovereignty-shredding trade agreements and the unpunished crimes of Wall Street against Main Street.”

In the face of this kind of rhetoric, Wall Street sees a potential ally in Mrs Clinton.

Mrs. Clinton was the industry’s home state senator, and the financial sector was the second-largest giver to her presidential campaign in 2008. In her post-State Department life, she has been showered with lucrative speaking fees from Goldman Sachs, J. P. Morgan and other financial firms. In her talks, she says it is unproductive to vilify the industry, and she avoids the kind of language that puts off financial executives, as when President Obama referred to “fat cat” bankers in 2009.

Imagine if you will a campaign of Hillary Clinton against Rand Paul in which Hillary and her Neo Con backers defend Wall Street, the NSA, crony capitalism and increasing defense budgets while Rand Paul fights the battle that Nader has laid out. I will be honest that I don’t know Paul’s real record that well, but I’ve got to say that I would think twice before voting for a President backed by the Neo Cons, who as Stephen Walt has pointed out have done untold damage.

From 2001 until sometime around 2006, the United States followed the core neoconservative foreign-policy program. The disastrous results of this vast social science experiment could not be clearer. The neoconservative program cost the United States several trillion dollars and thousands dead and wounded American soldiers, and it sowed carnage and chaos in Iraq and elsewhere

The greatest achievement of the Obama administration has been to remove the Neo Cons from the councils of government. A Clinton restoration of that foreign policy philosophy would be an unmitigated disaster for the country.

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World Cup Collective Consciousness

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The French Sociologist Emile Durkheim created the concept of “Collective Consciousness” in the 1890′s. The University of Chicago Theories of Media states, “The phrase collective consciousness implies an internal knowing known by all, or a consciousness shared by a plurality of persons.” I thought about that while watching the US-Belgium World Cup Match along with tens of millions of fans around the world. As America begins to take the rest of the world’s version of football seriously, we are joining one of the few global “collective consciousness” happenings. When I think of the big water cooler events in the US–the Super Bowl or the Oscars–they are all really American centric events that may have a global audience, but they do not represent a “knowing known by all”.

So what changed in a America from four years ago during the last World Cup when we were not really part of the Global Village of Football fans? My guess is that the first aspect is that America is increasingly a nation of immigrants and those immigrants have a kind of dual loyalty. They can cheer for the US team and still root for their country of origin. The Annenberg Innovation Lab that I direct has recently done some fascinating work on understanding the different logics of fan engagement in the World Cup. Emotions like pride or mastery only come as you get more involved in the game and that is really beginning to happen among US fans. My guess they will keep watching even though the US has gone out of the tournament.

The second aspect that may have seeded the new audience has been the appearance of the English Premier League games on America television. What is bizarre is that teams like Manchester United have world wide fan communities (especially in Asia) and so this was a peek into the Collective Consciousness. Of course for fools like Ann Coulter, all this interest in the collective consciousness of the globe is downright scary. The cowboy myth of the rugged individual falls apart on the football pitch.

Even though we lost, I think there is a real future for “futbal” in American. Kids like Green and Yedlin are coming up. We played with out our best player, Jozy Altidore and Tim Howard gave one of the greatest goalkeeping exhibitions in history. Some day the US team will be in the World Cup finals.

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Could a Revolution Happen in the U.S.?

Labor Movement And An Organized College Walkout Add Support To Occupy Wall Street Protest

Nick Hanauer, the only rich VC who was ever censored by Ted talks, just posted an essay on Politico, entitled The Pitchforks are Coming…for us Plutocrats. He raises the spector of a revolution in America unless the issue of income inequality is addressed.

What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we’re somehow going to know about that shift ahead of time. Any student of history knows that’s not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there’s no time for us to get to the airport and jump on our Gulfstream Vs and fly to New Zealand. That’s the way it always happens. If inequality keeps rising as it has been, eventually it will happen. We will not be able to predict when, and it will be terrible—for everybody. But especially for us.

The image of a combination of Occupy veterans and Tea Party populists marching on the headquarters of JP Morgan Chase with pitchforks is evocative, but for me it remains in the realm of speculative fiction. If you look at the history of inequality in both the U.S. and Europe you come to some pretty clear conclusions. The first is that which political party is in power doesn’t seem to make much difference.

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Looking at the U.S., from 1810-1910, the rise of the plutocrats was very steady, no matter which party was in power. Then in 1913 the Sixteenth Amendment to the Constitution was passed, allowing an income tax and the share of the top 10% began a slow decline. This movement towards equality was reversed in the the mid 1970′s with the Tax cut revolution that started at the state level  (eg.Prop 13 in California) and continued with Reagan’s cuts to federal income tax rates. From a historical perspective the fact that 90% of the people have never owned more that 38% of the wealth in this country is a bit shocking, but now we have reached a point where the richest 1% of the country owns as much as the poorest 90% of the country.

All of this would seem to be fertile grounds for a populist uprising, and yet it has never happened in America. The reason?

Too much cheap entertainment. Marx never figured on TMZ or the Kardashians. Of course Aldous Huxley in “Brave New World” did understand the power of drugs and entertainment to render a polity so passive that the plutocrats would never have to worry about the pitchfork brigade. 52 million Americans use prescription drugs “non-medically”. Then you have social networking which eats up 3 hours a day for the average user. Then we spend 5 hours a day in front of the TV. 8 hours of sleep and two hours eating, who has time for work, much less marching in the streets?

Much as I would like to think that Nick Hanauer could scare his fellow plutocrats into supporting a major raise in the minimum wage, I am highly skepitcal. I don’t think the Millennial generation, which has the most to lose in continuing the status quo, has any gumption to take to the streets. They are deep in college debt, desperate for work and not interested in rocking the boat.

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In Praise of the Beautiful Game

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I’m not sure I know why the whole planet is transfixed by the World Cup, but I think its a good thing. Deep in the Amazon jungle, villages running their sole TV off of car batteries gather to celebrate athletic excellence. What distinguishes sporting acheivement from that in other fields, is that it can’t be faked. Brittany Spears can lip sync her Vegas concerts, and  Ted Cruz can pretend to be a statesman, but Cliff Dempsey has to show up and play his heart out with a broken nose for 90 minutes in the steaming heat of Manaus. No excuses. No pretending. The other thing that distinguishes World Cup football from American Football or Basketball is that the athletes are the kind of people you could encounter in an airport and not blink twice. The are not seven feet tall. They do not weigh 300 pounds.

The U.S. audience for this sport is growing and I think the fact that the American team will probably make it through to the next round will help grow the interest in the sport. Of course the US TV networks hate soccer, because there are no regular breaks for commercials, and so they have shunned the sport. But if ESPN’s ratings continue to grow, that may change. And of course, because we are a country of immigrants, it doesn’t really matter how far the US gets in the tournament, because we all have a second team to root for based on some great experience in Brazil, the Netherlands, Mexico or maybe France. The next three weeks will be fun.

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